Designating the beneficiary of a Texas life insurance policy should be simple. A consumer selects a life insurance policy and applies for the coverage. During the process a beneficiary is designated, and the life insurance carrier issues the policy. Most policy holders believe that the entire process ends when the policy is issued and there would never be a situation that would necessitate a beneficiary change in the policy. Nothing could be further from the truth. With changes that occur during the policy holder’s life, the need to update a policy with a change in beneficiary is highly probable.

Many consumers have the common misunderstanding that a policy designating one individual as the beneficiary will need to be completely rewritten in order to make a change in the beneficiary. A Texas life insurance agent should inform the policy owner that as long as premium payments are being made and a change in beneficiary is not expressly prohibited in the form of a legal agreement, the named beneficiary can be changed at any time. A change in beneficiary may be needed under many different circumstances. Assume that a male policy holder gets married at 24 and takes out a policy with a $500,000 death benefit. The policy holder indicates that his wife is the sole beneficiary. After a period of time, the couple has their first child. The life insurance policy should be changed to ensure that the child is protected as well as the mother. The policy holder will have several options in order to protect both spouse and child. The primary beneficiary can be split to cover both the wife and child on a 50/50 basis or whatever percentage the policy holder feels is fair. He can name the spouse as the primary beneficiary but, in the event of the spouse’s death, can make the child the primary beneficiary. The policy holder can also leave the death benefit to his estate and proceeds will be distributed as stipulated in the will.

The ability to make changes to a Texas life insurance policy was developed by the life insurance industry as a reaction to changes in society. Allowing beneficiary changes to be made within a policy was adopted to deal with a host of events including the death of a listed beneficiary, a divorce or an adoption. A policy holder can use the death benefit to protect a business by providing the financial resources to fund a buy-sell agreement. A charitable organization can be selected as the beneficiary in situations where no family members exist to be designated as a beneficiary. The policy holder can also name a trust as the beneficiary of the life insurance policy, and the beneficiaries of the trust would be the recipients of the death benefit.

In summary, over the course of a policy holder’s life many changes can occur that could not be anticipated at the time of the initial purchase of a life insurance policy. The life insurance industry has adjusted over time to allow changes in the beneficiary without having to reissue the policy.

Tim Jarvis is a licensed and experienced Texas life insurance agent who focuses on educating his fellow Texans on the best way to shop and quote Texas life insurance coverage